Rikhab Chand Jain vs Drp Financial Services Private Limited ...

IN THE MATTER OF: Rikhab Chand Jain Sole Proprietor of TT Industries ...Appellant(s)

Versus

DRP Financial Services Pvt. Ltd. & Ors. ...Respondent(s)

Present: For Appellant(s) : Mr. Mukul Raao & Mr. Anju Kumari Bhardwaj, Advocates

For Respondent(s) : Appearance not marked

ORDER

(Hybrid Mode)

06.10.2026 We have heard Learned Counsel for the Appellant and perused

the record.

2. The instant appeal has been preferred by the Appellant challenging the

impugned judgment/order dated 18.05.2023 passed by the Learned Adjudicating

Authority, National Company Law Tribunal, Principal Bench, New Delhi, in C.P. (IB)

No. 321/(PB)/2023, whereby the petition filed by the Appellant under Section 7 of

the Insolvency and Bankruptcy Code, 2016 ("Code") was dismissed.

3. Learned Counsel for the Appellant submits that he had filed the aforesaid

petition before the Learned Adjudicating Authority under Section 7 of the

Insolvency and Bankruptcy Code, 2016 ("Code"), seeking the following prayers;

1) To admit the application and pass an order for initiating the

Corporate Insolvency Resolution process under Section 7 of the

Insolvency and Bankruptcy Code, 2016 ("Code"):

2) To cause a public announcement of the initiation of corporate

Insolvency Resolution Process and calling submission of claims

under section 15 of the code; and

3) To declare a moratorium in term of Section 14 of the Code;

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4) Any other relief which this Hon'ble Bench think fit on the case. In

terms of Section 13 of the Insolvency and Bankruptcy Code, 2016

and provisions of the Company Act, 2013;

(a) The Corporate Debtor has defaulted in making the payment of the

financial debt to the applicant;

(b) The Demand Notice in Form 3 of the Insolvency and Bankruptcy

(Applicant to adjudicating authority) Rule, 2016 has been delivered

by the applicant to the Corporate Debtor demanding the payment of

the financial debt;

(c) No notice of existence of dispute has been received by the Financial

Creditor (i.e. Applicant) within a period of 10 days of the receipt of

the demand notice by the Corporate Debtor.

(d) There has been no repayment of the unpaid financial debt by the

Corporate Debtor to the Applicant/Financial Creditor.

4. It is further submitted that, without adverting to the merits of the impugned

order passed by the Learned Adjudicating Authority, the Appellant is aggrieved by

the fact that, while dismissing the petition filed by the Appellant under Section 7

of the Insolvency and Bankruptcy Code, 2016 ("Code"), the Learned Adjudicating

Authority has also imposed a penalty of Rs. 5 lakhs on the Appellant, simply on

the score that, after the matter was remanded by this Appellate Tribunal vide its

order dated 23.08.2024, desired documents were not filed by the Appellant before

the Learned Adjudicating Authority.

5. It is vehemently submitted that the Appellant through additional affidavit/

I.A. No. 122 of 2024 had filed along with the petition all the documents were in his

possession and, therefore, the Appellant may not be assumed guilty of any

misconduct in not providing any document which was in his possession. It is

vehemently submitted that the Learned Adjudicating Authority has assumed that

2|Page the Appellant has not filed certain documentary evidence which was in his

possession, whereas, in fact, there was no other document in the possession of the

Appellant, except those which have been filed along with the petition.

6. After arguing at some length Learned Counsel for the Appellant submits

that he under instruction is not pressing the appeal on other grounds except the

ground that the penalty imposed by Learned Adjudicating Authority of Rs. 5 lakhs

may kindly be waived and with regard to other prayers the appeal may be

dismissed as withdrawn with the liberty to explore such other remedies as may be

available to him in accordance with law, however, the penalty imposed by Learned

Adjudicating Authority may kindly be waived.

7. It is vehemently submitted that the Appellant is an old person aged about

82 years and would not be in a position to deposit the penalty of Rs. 5 lakhs

imposed by the Learned Adjudicating Authority and therefore, the same may be

waived of.

8. We have heard Learned Counsel for the Appellant and perused the record.

Having regard to the submissions advanced by Learned Counsel for the Appellant

it is revealed that the Appellant had earlier approached this Appellate Tribunal by

filing Comp. App. (AT) (Ins) No. 1103 of 2023, which was disposed of by this

Appellate Tribunal on 23.08.2024, whereby the liberty was granted to the

Appellant to place all relevant documents on record by way of an additional

affidavit before the Learned Adjudicating Authority.

9. It is submitted that, in furtherance with the direction of this Appellate

Tribunal vide order dated 23.08.2024, the Appellant has brought on record the

balance sheet and any certificate of NeSL default by an additional affidavit/ I.A. No.

122 of 2024, filed before the Learned Adjudicating Authority.

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10. We notice that, in paragraph No. 20 of the impugned order, the Learned

Adjudicating Authority has recorded that, despite the directions given by this

Appellate Tribunal to file the relevant documents on record by way of an additional

affidavit, the Appellant failed to file any such document and assuming the conduct

of the Appellant, in not filing the required document, imposed a penalty of Rs. 5

lakhs.

11. The explanation which has been given by Learned Counsel for the Appellant

is that in compliance of order of this Appellate Tribunal two documents were filed

before the Learned Adjudicating Authority through additional affidavit/I.A. No. 122

of 2024 and that the other documentary evidence was already on record, and also

that no other document was, in fact, available with the Appellant, therefore, he

could not file any other document except which was already on record and filed by

the Appellant through additional affidavit.

12. It is further submitted by Learned Counsel for the Appellant that the loan

agreement with regard to the transaction in question was never executed and,

therefore, was not available.

13. Be that as it may, the only ground on which the penalty of Rs. 5 lakhs

appears to have been imposed by the Learned Adjudicating Authority is the non-

filing of an additional affidavit and relevant documents, while it has been

specifically submitted before us by Learned Counsel for the Appellant that, in fact,

the balance sheet as well as NeSL certificate with regard to the default was filed by

him through additional affidavit before the Learned Adjudicating Authority, and

there was no loan agreement available with regard to the transaction in question.

14. In our considered opinion, bringing on record the balance sheet of the

relevant year as well as any NeSL certificate with regard to the default is sufficient

compliance of the directions given by us in our order dated 23.08.2024. Certainly,

4|Page a person may not be compelled to bring on record a document which is neither in

his possession nor in existence.

15. Having regard to all the facts and circumstance of this case and keeping in

view the submissions made by Learned Counsel for the Appellant for not pressing

of the appeal with regard to other prayers except imposition of penalty of Rs. 5

lakhs by the Learned Adjudicating Authority, the instant appeal is dismissed as

withdrawn with regard to other reliefs claimed by the Appellants, with liberty to the

Appellant to explore any such other remedy which may be available to him in

accordance with law.

16. However, so far as the penalty of Rs. 5 lakhs imposed by the Learned

Adjudicating Authority is concerned, for the reasons recorded hereinbefore, the

penalty of Rs. 5 lakhs imposed by the Learned Adjudicating Authority is hereby

waived.

17. There is no order as to costs. The pending I.A., if any, is also disposed of.

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Naresh Salecha] Member (Technical) KS/KM

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